Although massive open online courses have been gathering substantial recent attention, future histories of education will likely only note them as a harbinger of change or transitional step into an educational model that is organized around learning. In most cases, MOOCs operate on a grand scale but use a traditional form in which a faculty member (or two) is responsible for most aspects of course design, delivery, and assessment. The real threat to traditional higher education embraces a more radical vision that removes faculty from the organizational center and uses cognitive science to organize the learning around the learner. Such models exist now.
Consider, for example the implications of Carnegie Mellon’s Open Learning Initiative.  More than 10 years ago, Herb Simon, the Carnegie Mellon University professor and Nobel laureate, declared, "Improvement in postsecondary education will require converting teaching from a solo sport to a community-based research activity." The Open Learning Initiative (OLI) is an outgrowth of that vision and has been striving to realize it for more than a decade.
Teams of cognitive scientists, technology consultants, designers, and disciplinary specialists are designing interactive, online courses that are available now from OLI. The program uses the latest research in cognitive science to inform course design, and it tests each element of the design by evaluating its effectiveness in promoting student learning. As more students take courses and the integrated assessments, the OLI team gathers more data that allow team members to further refine the course. Creating such courses is capital-intensive, but since students interact solely with the computer when taking the course, the marginal cost to deliver the course to each additional student is minimal.
OLI in its current incarnation is a proof-of-concept endeavor, and in 2012, Ithaka S+R published findings  that demonstrate it has succeeded. A rigorous study comparing student learning in a traditional face-to-face statistics course to that of students in a hybrid OLI course found that the hybrid courses were at least as effective in promoting student understanding of statistics as traditional courses. Further, students in the hybrid courses learned as much even though they spent significantly less time in learning activities, which echoes earlier work by OLI  showing that Carnegie Mellon students learned statistics with OLI in half the time that students in traditional courses did. We should note that the hybrid courses were not offered fully online. Students worked through the material using OLI’s online interactive materials and met as a group once weekly with a course tutor.
With the Ithaka S+R finding, OLI has reached a milestone, and it is reasonable to assume that continued investment in refining its courses will yield additional gains in student learning or efficiency. We can howl in protest, but the question is no longer whether computer-based, intelligent agents can prompt learning of some material at least as well as instructor-focused courses. The question is whether the computer-based version can become even more effective than traditional models, and the implications for higher education are sobering.
Let us suppose, for example, that Southern New Hampshire University (SNHU), which is already pioneering competency-based credentialing, partners with OLI to create New Way College (NWC) within SNHU. New Way College supports community-based educational initiatives through which students can earn an associate degree while paying significantly less than is available to eligible students receiving the maximum Pell Grant. (I want to stress that this is a hypothetical example generated to demonstrate how things might play out. It is not based on any plan announced by SNHU or on any inside information from SNHU or the other real organizations mentioned in this essay.)
With backing from foundations or venture capitalists, NWC will pay OLI $25 million to develop 30 interactive, online courses that will form the basis of NWC’s educational program. In addition, NWC will provide OLI $40 for each student enrolled in an NWC course in exchange for ongoing course development and support. The courses themselves are taught in hybrid fashion in classes with no more than 20 students. Classes are sponsored in local communities by host organizations. Any nonprofit or educational organization — a public library, YMCA, school district, religious or service organization — could apply to be a host organization. Hosts would be responsible for providing a meeting space, recruiting classes of students, and identifying tutors for each class but not traditional faculty members.
To support program administration, NWC might then forge a long-term contract with Pearson Education, making Pearson responsible for recruiting, assessing, and supporting host organizations. Tutors are vetted, trained, and evaluated by Pearson to meet standards established by NWC, although host institutions would be responsible for paying those tutors who were not volunteers. As part of its services, Pearson would run a social media site that included tools for students to rate individual hosts and tutors, much like eBay and Amazon rate sellers in their marketplaces. The same site would also provide pass rates broken down by course so that prospective students could identify effective hosts near them.
Pearson would provide assessments aligned with NWC’s standards and a secure test site for mid-course and end-of-term assessments that would determine whether a student earned credit for the course. Classes would typically span 12 weeks and have limited enrollment to ensure that every student received the support he or she needed to succeed. Students would pay $100 per credit for courses, with the standard course carrying four credits and 64 credits required for an associate degree. Students who needed no remedial work could easily complete the program in two years and pay the minimum tuition of $6,400.
At the scale typical of most higher education institutions, this model makes no sense whatsoever, but at web scale, the model is compelling: Students would pay $400 to enroll in a typical four-credit class section, and courses would be designed so that there are minimal additional costs beyond online access. Of that $400, we assume $40 goes to OLI, $120 goes to the host institution, Pearson collects $200 for its services, and SNHU keeps $40. A 15-person class would generate $600 for OLI, $1,800 for the host (some of which might be used to pay a tutor), $3,000 for Pearson, and $400 for SNHU. If NWC offered 30 four-credit courses in a typical year — each of which enrolled a minimum of 10,000 students annually — OLI and SNHU would each collect at least $12 million in annual revenues,
Pearson would collect $60 million, and local hosts would collectively receive $36 million. Since the marginal cost of adding additional students would continue to decline as the number of students grows, early entrants using this model could quickly attain market dominance, much like Amazon, Apple, Walmart, Google, and eBay dominate much of their respective markets. If NWC could achieve similar market dominance in the two-year college market, annual revenues to be split among the partners would exceed $1 billion. A much larger sum might be lost by community colleges and other institutions, which charge more for courses leading to the same credits.
By unbundling the learning experience — separating local support, course design, delivery, assessment, administrative support, and advising — the NWC model achieves superior outcomes at lower cost, at least when outcomes are measured by exam or other task performance. Local organization and student support is provided by entities with deep roots in their communities, missions aligned with the educational endeavor, existing meeting spaces that are often underutilized and could readily be used to house weekly class meetings, access to volunteer or relatively low-cost tutors to provide student support, and budget constraints that create incentives to leverage these resources to market and support classes for their communities. A public library with an appropriate meeting space and quality volunteers who would be willing and able to support a class in exchange for $500 per class could expect to earn $1,000 per course after accounting for incidentals. A robust program offering 10 or more courses annually could afford to support a part-time program administrator.
Through OLI, expert teams design and deliver course content, assess course effectiveness, and continuously refine the interactive online tools to optimize student learning. Logistics, independent and verifiable testing of student learning, marketing, and social media tools for community-sourced assessment of host institutions and tutors are outsourced to a corporation with expertise and facilities that can sustain that work. The sponsoring college or university provides curricular structure, advising services, student tracking through its student information system, access to accreditation and federal financial aid, and legitimacy that connects the endeavor to the larger higher education landscape. Students can earn essential credentials in a supportive program whose standards would be widely understood and appreciated.
What is missing from this picture are professors at the center of course design, delivery, and assessment. Some might argue that is its fatal flaw, others that it is the mark of its genius. I consider it a reminder that other realities than the one in which we now live are possible. Should NWC or a similar organization gain market dominance and public acceptance for delivering two-year degrees, Clayton Christensen’s  model of disruption suggests it will move up market and take on the bachelor degree, which could underwrite the demise of any four-year college that was unable to articulate its value apart from the credential its students earn for passing exams.
If those of us at liberal arts colleges believe there is something of value in our current model, something that cannot be replicated by online programs in which students interact primarily with a machine rather than with an instructor, then we need to articulate what that is and demonstrate its value. Something essential is lost when the news industry is unbundled and newspapers, which historically had the resources to support extensive reporting staffs, are replaced by online news sources with much smaller budgets, and journalists find it hard to support themselves and their families by exercising their craft. Bemoaning that loss and advocating for journalists’ crucial civic role has not stopped the steady erosion of the news industry and the livelihoods of those who work in it. Traditional higher education, faculty, and others who work in the higher education face similar threats. We would be wise to consider how to respond while there is still time.
Richard Holmgren is chief information officer and associate dean of the college at Allegheny College.